DXC Technology (DXC - Free Report) recently announced that it is acquiring Salesforce (CRM - Free Report) Platinum partner, System Partners, in a bid to ramp-up its digital transformation strategy and focus on cloud-first approach.
System Partners, a provider of customer-centric services like advisory, strategy designing, tailored managed services and the like, boasts more than 100 Salesforce certified consultants in Sydney, Melbourne and Canberra.
Management at DXC Technology believes that the buyout is a strategic move to support and cater to existing customers more efficiently, and strengthen its position in the cloud market.
Apart from promoting DXC Technology’s focus on cloud-first approach, this acquisition will also help both the companies to expand the reach of their services to each other’s customer bases.
Cloud-First Strategy to Boost Business
With the growing predominance of the cloud across all industries, the relevance of the cloud-first strategy in IT operations of most businesses has strengthened. This approach deliberates the utilization of the cloud, offering multiple cost-saving and productivity-boosting benefits.
Per International Data Corporation (IDC), cloud-first strategies contribute majorly to the spate of cloud services that is taking the enterprise industry by storm. The cloud services market is predicted to surpass $141 billion market value by 2019, resulting in a greater business spending on cloud services than on IT services.
Management noted that demand for multi-cloud solutions resulted in 42% growth in its cloud business in the last reported quarter, and improvement in enterprise spending on cloud is driving its Digital segment revenues, which grew 21% in the same period.
Digital Transformation Drives Growth
Another major driving factor behind the acquisition is the fact that it will expedite the digital transformation across mutual enterprise clients.
Per IDC, spending on digital transformation will reach $1.7 trillion globally by the end of 2019, up 42% from 2017. The research firm also predicted that all digitally transformed organizations are expected to generate at least 45% of their revenues from technologies adopted as a result of digital transformation.
These predictions make digital transformation all the more attractive to enterprises, driving them to adopt solutions, which will help accelerate the transition.
Acquisitions Boding Well for DXC Technology
DXC Technology’s continued focus on acquisitions to expedite growth is helping it gain access to newer markets and technologies. The System Partners buyout builds on the company’s strategy of expanding its reach in the Australian and New Zealand markets, for which it has already started taking robust steps.
In March this year, DXC Technology acquired Australian Oracle (ORCL - Free Report) cloud partner M-Power Solutions, following which it bought Melbourne-based Microsoft (MSFT - Free Report) partner, Sable37.
We believe the acquisitions will further strengthen DXC Technology’s position as one of the leading cloud and IT services provider in the world. Moreover, the buyouts continue to help the company boost revenues amid intensifying competition in the cloud computing market.
DXC Technology currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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